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0 pointsraincom2y ago0 comments

Two things:

(a) Banks can be vague in their SAR filings with “transaction with no apparent economic, business or lawful purpose”

(b) What BSA manul says: "No bank, and no director, officer, employee, or agent of a bank that reports a suspicious transaction may notify any person involved in the transaction that the transaction has been reported." [1]

This deadly combination is enough for banks to NOT disclose. That's why a vague reason is provided by banks; here is Chase's template: "Financial institutions have an obligation to know our customers and monitor transactions that flow through our customers' accounts. After careful consideration, we decided to close your account because of unexpected activity on these or another Chase account."

[1] https://bsaaml.ffiec.gov/manual/AssessingComplianceWithBSARe...

0 comments

elzbardico2y ago

The manual says that customer should not be informed for the reasons of reporting. But it doesn't say the banks should close the accounts.

raincomOP2y ago

Since the first SAR is filled with “transaction with no apparent economic, business or lawful purpose”, subsequent transactions from the same account would become "transactions with no apparent economic, business or lawful purpose". So, Banks are on the hook to file subsequent SARs. Banks exit customers after a couple of SARs in the name of de-risking.

One way to avoid getting out of this trap is to join the club of "private banking" services provided by big banks. It is like Airline's first class vs. economy class customers. Banks put different resources for private banking clients such as: (a) manual override by humans (b) reduce false positives by algorithms by tweaking parameters (c) specialized representatives, cust service folks.

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